**SECURITIESAND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

 

**FORM10–K**

 

**ANNUALREPORT PURSUANT TO SECTION 13****OF THESECURITIES EXCHANGE ACT OF 1934**

 

| **For the  fiscal year ended June 30, 2003** |   | **Commission File Number 1-7256** |
|---------------------------------------------------|--------|-----------------------------------|

 

| **INTERNATIONAL ALUMINUM CORPORATION**                                      |
|-----------------------------------------------------------------------------|
| (Exact  name of Registrant as specified in its charter)                     |
|                                                                        |   |   |
| **California**                                                              |   | **95-2385235** |
| (Incorporation)                                                             |   | (I.R.S.  Employer No.) |
|                                                                        |   |   |
| **767 Monterey Pass Road  Monterey Park, California 91754  (323) 264-1670** |
| (Principal  executive office)                                               |
|                                                                        |   |   |
| **Securities  registered pursuant to Section 12(b) of the Act:**       |

 

| **Title  of Each Class**        |   | **Names  of Exchanges on Which Registered** |
|---------------------------------|--------|---------------------------------------------|
|                            |   |                                        |
| Common  Stock ($1.00 Par Value) |   | New  York Stock Exchange                    |

 

**Securitiesregistered pursuant to Section 12(g) of the Act:**  None

 

Indicate by check mark whether the Registrant(1) has filed all reports required to be filed by Section 13 of theSecurities Exchange Act of 1934 during the preceding 12 months and (2) has beensubject to such filing requirements for the past 90 days.  Yes   ý   No  o

 

Indicate by check mark if disclosure ofdelinquent filers pursuant to Item 405 of Regulation S-K is not containedherein, and will not be contained, to the best of Registrant’s knowledge, indefinitive proxy or information statements incorporated by reference in Part IIIof this Form 10-K or any amendment to this Form 10-K.    ý

 

Indicate by check mark whether the registrantis an accelerated filer (as defined in Rule 12b-2 of theAct).  Yes  ý   No  o

 

At September 10, 2003 there were4,244,794 shares of Registrant’s Common Stock outstanding.  The aggregate market value of shares held bynon-affiliates was $50,746,675 based on the New York Stock Exchange compositeclosing price on that date.

 

**DOCUMENTS INCORPORATED BY REFERENCE**

 

Registrant’s Annual Report to Shareholdersfor fiscal year ended June 30, 2003 is incorporated by reference intoParts I and II.

 

Registrant’s Proxy Statement datedSeptember 19, 2003 for the Annual Meeting of Shareholders to be held onOctober 30, 2003 is incorporated by reference, other than the StockPerformance Graph, the Compensation Committee Report, and the Audit CommitteeReport, into Part III.

 

 

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PARTI

 

 

ITEM 1.                        BUSINESS

 

a.   GENERAL DEVELOPMENT OFBUSINESS

 

International Aluminum Corporation is an integrated building productsmanufacturer of diversified lines of quality aluminum and vinyl products.  The Company was incorporated in Californiain 1963 as successor to an aluminum fabricating business begun in 1957 andmaintains its executive offices at 767 Monterey Pass Road, Monterey Park,California 91754.  The Company’stelephone number is (323) 264-1670. Reference to the “Registrant”, “International Aluminum Corporation” orthe “Company” includes International Aluminum Corporation and its subsidiariesunless the context indicates otherwise.

 

 

b.   INDUSTRY SEGMENTS, LINESOF BUSINESS AND CLASSES OF PRODUCTS

 

This information is included on pages 4 and 15 of the Registrant’s 2003Annual Report to Shareholders and is hereby incorporated by reference.

 

 

c.   NARRATIVE DESCRIPTION OFBUSINESS

 

Processes and Products

 

Residential

 

Residential products are fabricated from aluminum and vinyl into abroad line of horizontal sliding windows, vertical sliding windows, casementwindows, garden windows, bay and bow windows, special configuration windows,louvre windows, patio doors, wardrobe mirror doors and related products.  These products are used in new residentialconstruction and in remodeling, home improvement and replacement.

 

Commercial

 

Commercial products are fabricated from aluminum into curtainwalls,window walls, slope glazed systems, storefront framing, entrance doors andframes and commercial operable windows for exterior applications andofficefronts, office partitions, doors and frames for interior applications.  These products are utilized in varyingcombinations to produce systems used for office and commercial construction,remodeling and tenant improvement applications.

 

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AluminumExtrusion

 

In the extrusion process, heated aluminum billets are hydraulicallyforced through steel dies to produce a piece of metal of the desiredcross-sectional shape and length.  Theextrusions are then cut and, when requested, anodized or painted in a varietyof finishes in the Company’s anodizing and painting departments.

 

Aluminum extrusions produced by the Company are used in fabricatingsubstantially all of its other aluminum products. During fiscal 2003approximately 50% of extrusions produced were sold to non-affiliated customersin either its own or other widely diversified industries.  The Company furnishes design services toassist its customers in developing or better utilizing custom extrusions.

 

 

Sales and Distribution

 

The Company markets its residential products primarily to lumber yards,home improvement centers, independent dealers and distributors, with whom theCompany has no long-term contracts. Commercial building products are marketed primarily to glazing andtenant improvement contractors. Aluminum extrusions are marketed principally by direct sales to othermanufacturers.

 

Each of the Company’s subsidiaries has its own administrative and salesorganizations.  Sales are made primarilyin North America.

 

No customer accounted for more than 5% of net sales in 2003, and nomaterial part of the business is dependent upon a single customer or a fewcustomers, the loss of any one or more of whom would have a materially adverseeffect on the business of the Company. The Company does business on a current basis and has no significant backlogof unfilled firm orders.

 

 

Seasonality

 

Sales of products designed for residential and commercial applicationsare subject to cyclical swings in new construction and seasonal fluctuationsdue to reduced construction activity in some marketing areas during the wintermonths (second and third quarters).

 

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Materials

 

The Company purchases its aluminum requirements from primary aluminumproducers, under supply agreements at market prices, or spot metal brokers.  Although increased worldwide demand producesperiods of tight supply of aluminum, the Company has had satisfactoryexperience to date in obtaining sufficient raw materials to meet itsrequirements and does not anticipate material shortages that wouldsignificantly hamper its operations.

 

Flat glass is purchased from domestic glass manufacturers.  The Company has had satisfactory experienceto date in obtaining sufficient glass to meet its requirements.

 

The Company produces the aluminum extrusions used in the products itmanufactures and sells.  Vinyl, hardwareand small parts are purchased from outside sources.

 

 

Working Capital

 

To maintain an adequate supply of aluminum to meet customer deliveryrequirements and to assure itself of a continuous allotment of materials fromits suppliers, the Company may at times carry a significant inventory ofaluminum.  Depending on price andavailability, bulk quantities may be purchased from either primary aluminumproducers or from spot metal brokers.

 

The Company does not believe there are any abnormal working capitalrequirements associated with any of its product groups as merchandise isnormally produced for specific customer orders or shipped from inventory and asa general practice extended payment terms are not granted to customers.

 

 

Employees

 

As of June 30, 2003, the Company had approximately 1,400 full-timeemployees.

 

 

Patents

 

The Company has no material patents, either issued or pending, and isnot a party to any significant licensing agreements.

 

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Competition and Risk

 

The business of International Aluminum is highly competitive.Competition in all product lines is on the basis of price, service and productquality.  The manner and extent of such competitiondepends on the product being marketed and the relevant marketing area.  The Company faces competition primarily fromnumerous fabricators.  Several of theCompany’s major competitors in selling commercial products and aluminumextrusions are substantially larger, more diversified and have greaterresources than the Company.

 

Expansion of its product lines may result in the Company competing withcertain of its present customers.  Whilethe Company cannot accurately predict the effect, if any, that such developmentwould have on its business, the Company anticipates no material adverse effect.

 

Since a substantial portion of the Company’s business is connected withresidential and commercial building construction, any significant decrease innew or remodeling construction could adversely affect revenues.  Experience has shown that high interestrates for construction financing, residential mortgage and home improvementloans may adversely affect revenues.

 

 

Environmental Controls

 

The Company’s aluminum extrusion, anodizing, painting and manufacturingfacilities are subject to water and air pollution control standards mandated byfederal, state and local law.  While theCompany anticipates no material capital expenditures to meet establishedenvironmental quality control standards, there can be no assurance that morestringent standards will not be established which might require suchexpenditures.

 

 

d.                                                    FINANCIAL INFORMATION ABOUT FOREIGN ANDDOMESTIC OPERATIONS

 

The information concerning income before taxes of foreign and domesticoperations for fiscal years 2003, 2002 and 2001 is set forth in Note 9 to theconsolidated financial statements included on page 14 of the Company’s 2003Annual Report incorporated herein by reference.  Other related information regarding foreign operations is notsignificant for disclosure.

 

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ITEM 2.                        PROPERTIES

 

The following table sets forth information concerning the location,size and use of the Company’s present facilities:

 
| **Location**            |   | **Square  Feet (A)** |   | **Use**                                       |   |
|-------------------------|--------|----------------------|--------|-----------------------------------------------|--------|
|                    |   |                 |   |                                          |   |
| Alhambra, CA            |   | 185,000              |   | Aluminum extrusions,  foundry & finishing |   |
| Waxahachie, TX          |   | 269,000              |   | Aluminum extrusions &  finishing          |   |
| South Gate, CA          |   | 189,000              |   | Residential products                          |   |
| Hayward, CA             |   | 103,000              |   | Residential products                          |   |
| Phoenix, AZ             |   | 100,000              |   | Residential products                          |   |
| Vernon, CA              |   | 134,000              |   | Commercial products                           |   |
| Bedford Park, IL        |   | 81,000               |   | Commercial products                           |   |
| Boston, MA              |   | 21,000               | (L)    | Commercial products                           |   |
| Detroit, MI             |   | 12,000               | (L)    | Commercial products                           |   |
| Waxahachie, TX          |   | 159,000              |   | Commercial products                           |   |
| Denver, CO              |   | 16,000               | (L)    | Commercial products                           |   |
| St. Louis, MO           |   | 14,000               | (L)    | Commercial products                           |   |
| Dallas, TX              |   | 36,000               | (L)    | Commercial products                           |   |
| Houston, TX             |   | 19,000               | (L)    | Commercial products                           |   |
| Rock Hill, SC           |   | 74,000               |   | Commercial products                           |   |
| Atlanta, GA             |   | 37,000               | (L)    | Commercial products                           |   |
| Baltimore, MD           |   | 20,000               | (L)    | Commercial products                           |   |
| Langley, B.C., Canada   |   | 63,000               |   | Commercial products                           |   |
| Guelph, Ontario, Canada |   | 72,000               |   | Commercial products                           |   |
| Houston, TX             |   | 57,000               |   | Commercial products                           |   |
| Waxahachie, TX          |   | 60,000               |   | Commercial products                           |   |
| Dallas, TX              |   | 14,000               | (L)    | Commercial products                           |   |
| Monterey Park, CA       |   | 19,000               | (L)    | Executive offices                             |   |

 

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(A)           Includes manufacturing, warehouse and office space; excludesconstruction in process, parking and yard storage space.

 

(L)              Indicates leased premises.

 

 

Of the 1,754,000 square feet exhibited above, 1,546,000 square feet areowned by the Company.  The balance of208,000 square feet is leased under agreements expiring at various dates.  The Company believes that its facilities areadequate for anticipated levels of operations.

 

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ITEM 3.                        LEGAL PROCEEDINGS

 

The Company has litigation pending arising from the conduct of itsbusiness, none of which is expected to have any material effect on theCompany’s financial position.

 

ITEM 4.                        SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

 

No matters have been submitted to a vote of security holders that arerequired to be reported under the instructions to this item.

 

PARTII

 

ITEM 5.                        MARKET FOR THE REGISTRANT’S COMMON STOCK ANDRELATED STOCKHOLDER MATTERS

 

The market and dividend information is included on pages 7 and 16 ofthe Company’s 2003 Annual Report to Shareholders and is incorporated herein byreference.

 

There are no restrictions of future cash dividends.

 

There were approximately 400 shareholders of record of the Company’scommon stock at June 30, 2003.

 

ITEM 6.                        SELECTED FINANCIAL DATA

 

Selected financial data pertaining to the Company for the last fiveyears is set forth on page 4 of the Company’s 2003 Annual Report toShareholders and is incorporated herein by reference.

 

ITEM 7.                        MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

This information is set forth on pages 2 through 7 of the Company’s2003 Annual Report to Shareholders and is incorporated herein by reference.

 

ITEM7A.                    DISCLOSURES ABOUT MARKET RISK

 

Fluctuating foreign exchange rates may impactthe Company’s earnings.  The Company’sforeign exchange exposure is related to activities associated with its Canadiansubsidiaries.  The Company does notattempt to manage these risks by entering into forward exchange contracts.

 

 

ITEM 8.                        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

See Part IV, Item 15.

 

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ITEM 9.                        CHANGES IN AND DISAGREEMENTS WITH AUDITORS ONACCOUNTING  AND FINANCIAL DISCLOSURE

 

There have been no disagreements that are required to be reported underthe instructions to this item.

 

 

PARTIII

 

The information required under Part III is contained in the Company’sProxy Statement for the Annual Meeting of Shareholders to be heldOctober 30, 2003, which information is incorporated herein by reference.

 

 

PARTIV

 

ITEM 14.                  CONTROLS AND PROCEDURES

 

Within 90 days prior to the filing date of this report, a review wasperformed under the supervision and with the participation of the Company’smanagement, including the Chief Executive Officer (“CEO”) and the ChiefFinancial Officer (“CFO”), of the effectiveness of the design and operation ofthe Company’s disclosure controls and procedures.  Based on that review, the Company’s management, including the CEOand CFO, concluded that the Company’s disclosure controls and procedures wereeffective.  There have been nosignificant changes in the Company’s internal controls or in other factors thatcould significantly affect these controls subsequent to the completion of theirreview.

 

ITEM 15.                  EXHIBITS, FINANCIAL STATEMENT SCHEDULES ANDREPORTS ON FORM 8-K

 
| (a)    | 1.     | Financial Statements          |
|--------|--------|-------------------------------|
|   |   |                          | Consolidated Financial  Statements (See Note): |
|   |   |                          |   | Balance sheets - June 30,  2003 and 2002 |
|   |   |                          |   | Statements for the three  years ended June 30, 2003 - |
|   |   |                          |   |   | Income |
|   |   |                          |   |   | Shareholders’  equity |
|   |   |                          |   |   | Cash flows |
|   |   |                          |   | Notes to  consolidated financial statements |
|   |   |                          |   | Report of independent  auditors |
|   |   |                          |   |   |   |
|   | 2.     | Financial Statement Schedules |
|   |   |                          | Report  of Independent Auditors on Financial Statement Schedules |
|   |   |                          | Schedule for  the three years ended June 30, 2003 - II  Valuation and qualifying accounts |

 

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3.     Exhibits

 

3.1                       Articles of incorporation and by-laws.  This information is set forth as Exhibits2.2 and 2.3 to the September 9, 1977 Registration Statement on Form S-7,and was amended by Proxy Statements dated September 26, 1978 andSeptember 21, 1988 furnished to shareholders in connection with therelated Annual Meeting of Shareholders held on October 26, 1978 andOctober 27, 1988, respectively. These documents were filed by the Registrant with the Securities andExchange Commission and are incorporated herein by reference.

 

4.1                       Instruments defining the rights of securityholders, including the indentures.  Thisinformation is set forth on page 10 of the August 1, 1968 RegistrationStatement on Form S-1, as amended, filed by the Registrant with the Securitiesand Exchange Commission and is incorporated herein by reference.

 

13.1                 Annual Report to Shareholders

 

21.1                 Subsidiaries of the registrant

 

23.1                 Consent of PricewaterhouseCoopers LLP

 

31.1                 Certificationof the Chief Executive Officer pursuant to Section 302 of the Sarbanes-OxleyAct of 2002

 

31.2                 Certification of the Chief Financial Officerpursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

32.1                 Certification of the Chief Executive Officerpursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906of the Sarbanes-Oxley Act of 2002

 

32.2                 Certification of the Chief Financial Officerpursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906of the Sarbanes-Oxley Act of 2002

 

(b)         Reports on Form 8-K filed during the quarter ended June 30, 2003:

May 13,2003 – Reporting the press release dated May 13, 2003 announcing financialresults for the third quarter ended March 31, 2003.

 

NOTE:            The consolidated financial statementsreferred to above are included in the 2003 Annual Report to Shareholders and areincorporated herein by reference.

 

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SIGNATURES

 

 

Pursuant to the requirements ofSection 13 or 15(d) of the Securities Exchange Act of 1934, the Registranthas duly caused this report to be signed on its behalf by the undersigned,thereto duly authorized.

 
|                                            | INTERNATIONAL ALUMINUM  CORPORATION |
|-------------------------------------------------|-------------------------------------|
|                                            |                                |   |
| Date:   September 19,  2003 | By:                                 | /s/ MITCHELL K. FOGELMAN |   |
|                                            |                                | Mitchell  K. Fogelman |   |
|                                            |                                | Senior  Vice President-Finance  and Chief Financial Officer |   |

 

Pursuant to the requirements of theSecurities Exchange Act of 1934, this report has been signed below by thefollowing persons on behalf of the Registrant and in the capacities and on thedates indicated.

 
| **Signature**                |   | **Title**                   |                            | **Date** |                    |
|------------------------------|--------|-----------------------------|---------------------------------|----------|-------------------------|
|                         |   |                        |                            |     |                    |
| /s/ CORNELIUS C.  VANDERSTAR |   |                        | Chairman of the Board and       |     | September 19, 2003 |   |
| Cornelius C. Vanderstar      |   | Chief Executive Officer     |                            |     |                    |
|                         |   |                        |                            |     |                    |
| /s/ DAVID C. TREINEN         |   |                        | Director; President;  Secretary |     | September 19, 2003 |   |
| David C. Treinen             |   | and Chief Operating Officer |                            |     |                    |
|                         |   |                        |                            |     |                    |
| /s/ RONALD L. RUDY           |   |                        | Director and Senior             |     | September 19, 2003 |   |
| Ronald L. Rudy               |   | Vice President-Operations   |                            |     |                    |
|                         |   |                        |                            |     |                    |
| /s/ MITCHELL K. FOGELMAN     |   |                        | Senior Vice  President-Finance  |     | September 19, 2003 |   |
| Mitchell K. Fogelman         |   | and Chief Financial Officer |                            |     |                    |
|                         |   |                        |                            |     |                    |
| /s/ MICHAEL J. NORRING       |   |                        | Controller and Chief            |     | September 19, 2003 |   |
| Michael J. Norring           |   | Accounting Officer          |                            |     |                    |
|                         |   |                        |                            |     |                    |
| /s/ DAVID M. ANTONINI        |   |                        | Director                        |     | September 19, 2003 |   |
| David M. Antonini            |   |                        |                            |     |                    |
|                         |   |                        |                            |     |                    |
| /s/ JOHN P. CUNNINGHAM       |   |                        | Director                        |     | September 19, 2003 |   |
| John P. Cunningham           |   |                        |                            |     |                    |
|                         |   |                        |                            |     |                    |
| /s/ ALEXANDER L. DEAN        |   |                        | Director                        |     | September 19, 2003 |   |
| Alexander L. Dean            |   |                        |                            |     |                    |
|                         |   |                        |                            |     |                    |
| /s/ JOEL F. McINTYRE         |   |                        | Director                        |     | September 19, 2003 |   |
| Joel F. McIntyre             |   |                        |                            |     |                    |

 

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REPORTOF INDEPENDENT AUDITORS ONFINANCIAL STATEMENT SCHEDULES

 

 

To the Board of Directors of

International AluminumCorporation

 

Our audits of theconsolidated financial statements referred to in our report datedAugust 22, 2003 appearing in the 2003 Annual Report to Shareholders ofInternational Aluminum Corporation (which report and consolidated financialstatements are incorporated by reference in this Annual Report on Form 10-K)also included an audit of the Financial Statement Schedule listed in Item14(a)2 of this Form 10-K.  In ouropinion, this Financial Statement Schedule presents fairly, in allmaterial respects, the information set forth therein when read in conjunctionwith the related consolidated financial statements.

 

PricewaterhouseCoopers LLP

 

Los Angeles, California

August 22, 2003

 

F-1

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INTERNATIONALALUMINUM CORPORATION AND SUBSIDIARIES

 

SCHEDULE II - VALUATIONAND QUALIFYING ACCOUNTS

 

ForThe Three Years Ended June 30, 2003

 

 
| **Description**                |   | **Balance at  Beginning  of Year** |      | **Amounts  Charged  to Income** |   | **Amounts  Written  Off** |   | **Balance at  End  of Year** |    |
|--------------------------------|--------|------------------------------------|-----------|---------------------------------|--------|---------------------------|--------|------------------------------|---------|
|                           |   |                               |      |                            |   |                      |   |                         |    |
| Reserves for doubtful accounts |   |                               |      |                            |   |                      |   |                         |    |
|                           |   |                               |      |                            |   |                      |   |                         |    |
| 2003                           |   | $                                  | 1,092,000 |                            | $      | 810,000                   |   | $                            | 518,000 |   | $ | 1,384,000 |   |
|                           |   |                               |      |                            |   |                      |   |                         |    |
| 2002                           |   | 775,000                            |      | 865,000                         |   | 548,000                   |   | 1,092,000                    |    |
|                           |   |                               |      |                            |   |                      |   |                         |    |
| 2001                           |   | 730,000                            |      | 497,000                         |   | 452,000                   |   | 775,000                      |    |
|                                |        |                                    |           |                                 |        |                           |        |                              |         |  |  |  |  |

 

F-2

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